The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1887-12-07
Question OF the Surplus the Only
Topic Discussed.
The Administrators Plan for Re-
duclng the Revenue.
a Programme That VIII Please the
Free Traders.

institutions guarantees to every citizen the
full enjoyment of all the fruits OF MS lndus-
try and enterprise, with only such deduction
as may be his share towards the careful ana
economical maintenance of the government
which protects him, II IS plaln tnat tne
exaction OF more than this is lndeIenslDie
extOrdOn, and culpable betrayal OF Amerl-
can fairness, and justice. This wrong IN,
fiicted upon those who bear the burden OF
national taxation, like other wrongs, multi
plies a brood Of evil consequences. Inc
public treasury, which should only exist as
conduit conveying the peoples trlpuse bsne ao ils
| hoarding-place for money needlessly Win
| drawn from trade and the peoples use, tnus
| Gripping our national energies, suspending
| our c0untry's DEVELOPMENT, preventing IN
| yestment in productive enterprise, threaten
| ing financial disturbance, and inviting
| schemes of public plunder.
| This condition Of our treasury Is not alto
| gether new; and 1t has more than once Oh
| late been submitted to the peoples represen.
| tatives in the Congress, who alone can apply
| a remedy And yet the situation still con-
| tinues, with aggravated incidents, more than
ever presaging financial conyuision and
II viii not do to neglect this situation be-
cause its dangers are not now palpably I'M
minent and apparent. They exist none the
| less certainly, and wait the unforeseen ana
unexpected occasion when suoueniy they
| will be precipitated upon us.
On the 3Oth day Of June. 1885, the excess
| of revenues over public expenditures after
complying with the annual requirement Oh
| the sinking-fund act, was S17 ,S59, 1903 dur
| ing the year ended June 80 1886, such excess
| amounted to S49, 9,405, 1890; and during the
| year ended June 30, 1887, 1t reached the sum
| Of S55, ,567, ,S49.54. r7
The annual contributions to the sinking
| fund during the three years above specified,
amounting in the aggregate to Sl3S, ,OoS, 5zO.y4,
| and deducted from the surplus as stated,
| were made by calling In for that purpose
| outstanding three per cent. bonds OF the
| government. During the six months prior
| to June 30, 1887, the surplus revenue had
grown so large Dy repeated acenmplsi4hss. nf thss
| great sum Of money needed by the people,
/ would so affect the business OF the country,
| that the sum Of SO, 100 Of such surplus
was applied to the payment Of the principal
/ and interest Of the three per cent. bonds still
| outstanding, and which were then payable
/ at the option Of the government. The pre-
| carious condition Of financial affairs among
| the people still needing relief. Immediately
i after the Both day of June, 1887, the remain
| der Of the three per cent. bonds then out
| standing, amounting with principal and
interest to the sum Of S1S,S77, 800, were called
| in and applied to the sinking-fund contribu-
i tion for the current fiscal year. Notwith-
| Standing these operations Of the Treasury
i Department representations OF distress In
| business circles not only continued but In
/ creased, and absolute peril seemed at hand.
Il In these circumstances Lut CUuLklDublOu W
| the sinking fund for the current fiscal year
| was at once completed by the expenditure OF
l S27. .684, ,283.55 In the purchase OF government
| bonds not yet due bearing four and four and
/ half per cent interest, the premium paid
Il thereon averaging about twenty-four per
/ cent for the former ana eight per cent. for
| the latter In addition to this the interest
| accruing during the current year upon the
/ outstanding bonded indebtedness OF the gov
i ernment was TO some extent anticipated, and
/ banks selected as repositories of public
/ money were permitted TO somewhat increase
i their deposits.
i While the expedients thus employed, to
release to the people the money lying Idle in
the Treasury, served TO avert immediate
danger, our surplus revenues have continued
to accumulate. the excess for the present
year amounting on the 1st day OF December
| to S55, ,258, 10, and estimated to reach the
sum Of S113,O00,0o0 on the 3Oth OF june next,
at which date 1t Is expected that this sum,
added to prior accumulations, will swell the
surplus in the Treasury to S140000,000.
| There seems to be no assurance that, with
such withdrawal from use OF the peoples 5
/ circulating medium, our business community
| may not In the near future be subjected to
/ the same distress which was quite lately pro-
/ duced from the same cause. And while the
| functions of our National Treasury should
| be few and simple, and while its best condi
| tion would be reached, believe, by its en-
| tire disconnection with private business in
terests, yet when, by perversion OF its pur
poses, 1t idly holds money uselessly subtract
/ ed from the channels of trade, there seems
| to be reason for the claim that some legiti-
/ mate means should be devised by the govern
| ment TO restore in an emergency, without
| waste or extravaganza, such money TO its
/ place among the people
| II such an emergency arises there now ex-
| lists no clear and undoubted executive power
| of relief. Heretofore the redemption of
three per cent. bonds, which were payable at
the option Of the government, has afforded
| means for the disbursement Of the excess Of
| our revenues; but these bonds have all been
| retired, and there are no bonds outstanding
the payments OF which we have the right to
| insist upon. The contribution to the sinking
| fund which furnishes the occasion for ex-
penditure in the purchase OF bonds has been
already made for the current year, so that
there Is no outlet In that direction.
In the present state of legislation the only
pretense OF any existing executive power to
restore, at this time, any part Of our surplus
| revenues to the people by its expenditure,
| consists in the suppositiOn that the Secretary
| of the Treasury may enter the market and
purchase the bonds OF the government not
yet due, at a rate of premium to be agreed
| upon. The only provision OF law from
| which such power could be derived is found
in an appropriation bill passed a number Of
years ago; and It Is subject to the suspicion
that it was intended as temporary and limit
ed in its application, instead Of comforting
a continuing discretion and authority. No
condition ought to exist which would justify
the grant Of power to single official, upon
his Judgment Of its necessity, to withhold
from or release to the business Of the people,
in an unusual manner, money held In the
Treasury, and thus affect at his will, the
financial situation of the country; and II 1t
is deemed wise to lodge in the Secretary Of
the Treasury the authority in the present
juncture to purchase bonds, 1t should be
plainly vested, and provided as far as posi-
BILE, with such checks and limitations as will
define this officials right and discretion, and
| ar the eamQ time rQlipVa him frOm un0up
sponsibility.
In considering the question Of purchasing
bonds as a means of restoring to circulation
the surplus money accumulating in the
Treasury, 1t should be borne in mind that
premiums must of course be paid upon such
purchase, that there may be large part OF
these bonds held as investments which can
not be purchased at any price, and that COM
binations among holders who are willing to
to sell, may unreasonably enhance the cost
of such bonds to the government. 1t has
been suggested that the present bonded debt
might be refunded at less rate Of interest,
and the difference between the old and new
security paid in cash, thus finding use for
the surplus in the Treasury. The success Of
this plan, 1t Is apparent, must depend upon
the volitiOn of the holders Of the present
| bonds and it Is not entirely certain that the
inducement which must be offered them
would resalt In more financial benefit 10 the
| government than the purchase OF bonds,
while the latter proposition would reduce
/ the DIluCUdl Vi luc uCOb W aStdoA pay htChtg
instead Of extending 1t.
The proposition to deposit the money held
| by the government In banks throughout the
country, for use by the people, Is, 1t seems to
me, exceedingly Objectionable In principle,
as establishing too close relationship be-
tween the operations OF the government
treasury and the business Of the country,
and too extensive commingling OF their
money, thus fostering an unnatural reliance
| in private business upon public funds. III
| this scheme should be adopted II should only
be done IS a temporary expedient TO meet an
urgent necessity. Legislative and executive
effort should generally be in the opposite
direction and should have tendency to di-
vorce, as much and as fast as can safely be
done. the Treasury Department from private
enterprise.
OF course tits not expected that unneces-
sary and extravagant appropriations will be
made for the purpose of avoiding the accu-
| mutation of an excess Of revenue. Such ex-
penditure. beside the Generalization Of all
Just conceptions o. public duty which IL en-
tails, stimulates habit of reckless improyi-
dence not in the least consistent with the
mission Of our peoph or the high and benef-
cent purposes Of ourgovernment.
/ have deemed 1t mg duty TO thus bring 10
the knowledge OF nv t0untrvnan as well a.